ECON 110 EXAM 1 KSU QUESTIONS WITH
CORRECT ANSWERS
The |production |possibility |model |can |be |used |to |demonstrate |the |concept |of |opportunity |cost
|- |CORRECT |ANSWER✔✔-True
Governments |establish |the |laws |that |regulate |the |interaction |between |businesses |and |
households |but |do |not |serve |as |actors |in |the |economy |themselves |- |CORRECT |ANSWER✔✔-
False
An |increase |in |demand |causes |equilibrium |price |and |quality |to |rise, |other |things |constant |- |
CORRECT |ANSWER✔✔-True
The |opportunity |cost |of |undertaking |an |activity |includes |any |sunk |cost |- |CORRECT |
ANSWER✔✔-False
Only |marginal |costs, |not |sunk |costs, |affect |economic |decisions |if |individuals |are |rational |- |
CORRECT |ANSWER✔✔-True
When |quantity |demanded |is |greater |than |quantity |supplied, |the |resulting |shortage |causes |the |
price |to |fall |- |CORRECT |ANSWER✔✔-False
Deciding |what |the |distribution |of |income |should |be |is |an |example |of |normative |economics |- |
CORRECT |ANSWER✔✔-True
, Two |nations |with |differing |comparative |advantages |will |be |able |to |consume |more |if |each |
produces |the |good |for |which |the |opportunity |cost |is |highest |and |trades |for |the |good |for |
which |opportunity |cost |is |the |lowest |- |CORRECT |ANSWER✔✔-False
The |law |of |supply |states |that |more |of |a |good |will |be |supplied |the |lower |its |price, |other |things |
constant |- |CORRECT |ANSWER✔✔-False
In |a |Market |economy, |Society |relies |on |the |self-interest |of |individuals |to |determine |what, |how,
|and |for |whom |to |produce |- |CORRECT |ANSWER✔✔-True
Propositions |that |are |logically |true |based |on |the |assumptions |of |a |model |are |known |as: |- |
CORRECT |ANSWER✔✔-Theorems
If |you |move |from |a |point |inside |the |productions |possibility |curve |to |a |point |on |the |
productuon |possibility |curve, |it |follows |that |efficiency |is: |- |CORRECT |ANSWER✔✔-Increased |
because |the |economy |Is |now |on |the |production |Possibility |curve
If |there |is |a |direct |relationship |between |two |variables, |the |graph |relating |those |two |variables |
will |be |- |CORRECT |ANSWER✔✔-Upward-sloping
Macroeconomics |includes |the |study |of |- |CORRECT |ANSWER✔✔-Inflation
Which |of |the |following |statements |is |correct |- |CORRECT |ANSWER✔✔-Both |stocks |and |bonds |
are |financially |assets
A |public |good |is |a |good |that |- |CORRECT |ANSWER✔✔-When |consumed |by |one |individual, |can |
still |be |consumes |by |others
CORRECT ANSWERS
The |production |possibility |model |can |be |used |to |demonstrate |the |concept |of |opportunity |cost
|- |CORRECT |ANSWER✔✔-True
Governments |establish |the |laws |that |regulate |the |interaction |between |businesses |and |
households |but |do |not |serve |as |actors |in |the |economy |themselves |- |CORRECT |ANSWER✔✔-
False
An |increase |in |demand |causes |equilibrium |price |and |quality |to |rise, |other |things |constant |- |
CORRECT |ANSWER✔✔-True
The |opportunity |cost |of |undertaking |an |activity |includes |any |sunk |cost |- |CORRECT |
ANSWER✔✔-False
Only |marginal |costs, |not |sunk |costs, |affect |economic |decisions |if |individuals |are |rational |- |
CORRECT |ANSWER✔✔-True
When |quantity |demanded |is |greater |than |quantity |supplied, |the |resulting |shortage |causes |the |
price |to |fall |- |CORRECT |ANSWER✔✔-False
Deciding |what |the |distribution |of |income |should |be |is |an |example |of |normative |economics |- |
CORRECT |ANSWER✔✔-True
, Two |nations |with |differing |comparative |advantages |will |be |able |to |consume |more |if |each |
produces |the |good |for |which |the |opportunity |cost |is |highest |and |trades |for |the |good |for |
which |opportunity |cost |is |the |lowest |- |CORRECT |ANSWER✔✔-False
The |law |of |supply |states |that |more |of |a |good |will |be |supplied |the |lower |its |price, |other |things |
constant |- |CORRECT |ANSWER✔✔-False
In |a |Market |economy, |Society |relies |on |the |self-interest |of |individuals |to |determine |what, |how,
|and |for |whom |to |produce |- |CORRECT |ANSWER✔✔-True
Propositions |that |are |logically |true |based |on |the |assumptions |of |a |model |are |known |as: |- |
CORRECT |ANSWER✔✔-Theorems
If |you |move |from |a |point |inside |the |productions |possibility |curve |to |a |point |on |the |
productuon |possibility |curve, |it |follows |that |efficiency |is: |- |CORRECT |ANSWER✔✔-Increased |
because |the |economy |Is |now |on |the |production |Possibility |curve
If |there |is |a |direct |relationship |between |two |variables, |the |graph |relating |those |two |variables |
will |be |- |CORRECT |ANSWER✔✔-Upward-sloping
Macroeconomics |includes |the |study |of |- |CORRECT |ANSWER✔✔-Inflation
Which |of |the |following |statements |is |correct |- |CORRECT |ANSWER✔✔-Both |stocks |and |bonds |
are |financially |assets
A |public |good |is |a |good |that |- |CORRECT |ANSWER✔✔-When |consumed |by |one |individual, |can |
still |be |consumes |by |others
